Thomson Reuters Corporation

Good day, everyone, and welcome to the Thomson Reuters third quarter earnings call. Today's conference is being recorded. At this time, I'd like to turn the call over to Gary Bisbee, head of investor relations. Please go ahead.

Thanks, Jenny. Good morning, and thank you for joining us today for our third quarter 2025 earnings call. I'm joined today by our CEO, Steve Hasker, and our CFO, Mike Eastwood, each of whom will discuss our results and take your questions following their remarks. To enable us to get to as many questions as possible, we would appreciate it if you'd limit yourself to one question and one follow-up each when we open the phone lines. Throughout today's presentation, when we compare performance period on period, we discuss revenue growth rates before currency as well as on an organic basis. We believe this provides the best basis to measure the underlying performance of the business. Today's presentation contains forward-looking statements and non-IFRS and other supplemental financial measures. which are discussed on this special notes slide. Actual results may differ materially due to a number of risks and uncertainties discussed in reports and filings that we provide to regulatory agencies. You may access these documents on our website or by contacting our investor relations department. Let me now turn it over to Steve Basker.

Thank you, Gary, and thanks to all of you for joining us today. Momentum continued in the third quarter with revenue in line and margins modestly ahead of our expectations. Total company organic revenues rose 7%, with the big three segments growing by 9%. In addition, healthy revenue flow through, beneficial revenue mix, and good cost discipline boosted margins, driving profit ahead of expectations. We are reaffirming our full year 2025 revenue and profit outlook, including our expectation for approximately 9% organic revenue growth for the big three segments. For the full year, our total and organic revenue growth is trending closer to 3% and 7%, respectively, rather than the higher ends of the ranges at 3.5% and 7.5%, for three reasons that are unrelated to our AI innovation momentum. First, a slower ramp of commercial print volumes. Secondly, several recent US federal government cancellations and downgrades. And third, slightly softer bookings trends at corporates following internal sales organizational changes aimed at improving future cross-selling. We see these as temporary factors not related to our growing innovation and AI-driven momentum, which continues to build. This is best illustrated by our legal professional segment accelerating to 9% organic revenue growth in the quarter, up from 8% in the first half of 2025, and 7% last year. And this is driven by continued Westlaw momentum and strong double-digit growth from both co-council and co-council drafting. Outside of legal, we continue to see double-digit growth from a number of key franchises, including SafeSend, Confirmation, Peguero, Indirect Tax, and our international businesses, to name a few. Looking to next year, we're updating our 2026 financial framework. We continue to expect organic revenue of 7.5% to 8%, including approximately 9.5% for the big three. And we now see larger year-over-year margin expansion and higher free cash flow than in our prior outlook. On the product front, customer feedback on the agentic AI launches over the summer has been very positive. and initial sales trends are encouraging, especially for the co-counsel legal integrated offer, Westlaw Advantage, and co-counsel for tax, audit, and accounting. The competitive dynamics for our core content-enabled technology offerings for Westlaw, practical law, and our tax engines remains stable. We see incremental competition in the AI assistance space, which is an exciting white space growth opportunity in which co-council remains a clear market leader. Our capital capacity and liquidity remain an asset that we are focused on deploying to create shareholder value. We recently completed the $1 billion share repurchase program announced in mid-August, and we remain extremely well capitalized with a net leverage of only 0.6 times at quarter end. We remain committed to a balanced capital allocation approach, and we continue to assess additional inorganic opportunities. With our estimated $9 billion of capital capacity through 2027, after the completion of the buyback, we are positioned to be both aggressive and opportunistic. Now for the results for the quarter. Third quarter organic revenues grew 7%. in line with our expectations. Organic recurring and transactional revenue grew at 9% and 4% respectively, while print revenue declined 4%. Adjusted EBITDA increased 10% to $672 million, reflecting a 240 basis point margin increase to 37.7%, higher than anticipated due to healthy operating leverage and good cost discipline. Turning to the third quarter results by segment, the big three segments delivered 9% organic revenue growth. Legal organic revenue grew 9%, improving from 8% in the first half of 2025 and 7% for all of last year. Continued momentum from Westlaw and Co-Counsel were key drivers. Organic revenues in corporates grew 7%, driven by offerings in our legal, tax and risk portfolios and the segment's international businesses. Tax and accounting organic revenues grew 10%, driven by our Latin American and U.S. businesses. Reuters News organic revenues rose 3%, driven by growth in the agency business and our contract with LSEG. And lastly, global print organic revenues declined 4% year on year. In summary, we're pleased with our Q3 results. I'll now... comment briefly on questions that we've heard in recent months about the value of our content, specifically Westlaw, in an AI environment and whether it could be replicated by large language models or newer AI competitors. We remain very confident in Westlaw's differentiation, which we believe has increased significantly with the development of deep research and agentic AI and the recent launch of Westlaw Advantage. It is very important to understand that litigation is high-stakes work with no room for error and significant consequences for being wrong. As a result, professional-grade legal research and workflow tools need to deliver comprehensive, accurate, and up-to-date outputs through trusted solutions with robust data privacy commitments. This is a very high bar, particularly given the scale, complexity and constant change of the legal ecosystem in the United States. There are hundreds of court systems and tens of millions of annual rulings. We collect content from more than three thousand five hundred sources in multiple formats, and it is completely unstructured. On an annual basis, we process more than 300 million documents into Westlaw. In addition, we have valuable and proprietary second source content, including practical law. Collection of source content is just step one. Our more than 1,500 attorney editors, armed with cutting edge technologies, turn the massive volume of unstructured data into structured proprietary content and intelligence. This includes linking cases, codifying statutes and regulations, authoring headnotes, and increasingly, creating new content for our AI offerings. In total, our team delivers more than 1.6 million editorial enhancements per year. Primary law content, including case law, statutes and regulations, is a significant majority of what users search in Westlaw. And 85%, I repeat, 85% of this content has been editorially enhanced. So 85% is in editorially enhanced. These enhancements are proprietary to Westlaw and make the source content far more valuable. Let me provide a few brief examples. First, the West key number system is our proprietary taxonomy or subject classification of the law. It covers more than 140,000 precise legal topic categories, capturing the law at an extremely granular level. The organization of case law, statutes and regulations against this taxonomy is key to the delivery of comprehensive and accurate results, allowing Westlaw users to zero in on very specific points of law. Second, Keysight, our proprietary citation network, has more than 1.4 billion connections linking legal matter with the taxonomy. Keysight verifies whether a case, statute or regulation is still good law. and finds accurate citing references to support legal arguments. And lastly, headnotes are summaries of the important issues of law within a case and are indexed against the key number system. This allows users to efficiently and accurately pinpoint the cases that best match their facts and desired outcome. To illustrate how the Westlaw content and editorial capabilities deliver value in an AI world, This slide outlines the key steps in our agentic approach for Westlaw Advantage. As you can see, our AI agents leverage Westlaw's breadth and depth of content. And critically, the extensive expertise of our editorial teams and the significant editorial enhancements that we create differentiates our agents, the output of which is delivered as professional-grade research that lawyers can trust. This graphic highlights another important differentiator for Westlaw. When doing legal research, validating research results is a key final step in the process. This is doubly important with any AI outputs which need to be checked for inaccuracies and hallucinations. In Westlaw, we have the leading tool set to deliver these validations, bringing confidence to our users that their citations are accurate and their legal arguments are correctly characterizing the law. The validation process leverages several tools I've already mentioned, including key number system, key site, and headnotes. In addition, Litigation Document Analyzer reviews legal briefs before they are submitted to the court, identifying inaccurate citations and misstatements of law. Combined with the industry's most robust editorial curated content set, the Westlaw tools provide lawyers with assurance that their legal arguments are on point and and they have done all that they can to prepare for court. While general purpose models can find cases and potentially make a legal argument, delivering against the industry's need for comprehensive, accurate, and current research is an extremely high bar. Our market-leading content, our editorial enhancement, and our sophisticated tool set have been built over decades to consistently deliver this standard while meeting the industry's data privacy and security needs. Looking forward, we see the evolution of AI from information retrieval and summarization to more complex agentic workflows as an opportunity for Thomson Reuters that reinforces the value and critical importance of our content and editorial expertise. In complex multi-step work, quality content to ground the outputs and subject matter expertise to train and fine-tune the AI are critical to delivering professional-grade results. Our innovation focus is squarely on leveraging these assets, leading content, and the deepest bench of domain experts in our end markets to deliver agentic solutions that are difficult, if not impossible, to replicate. I'll now turn it over to Mike to review our financial performance.